Are you buying your first home? You must be super excited. Soon you will be living independently – no worries of rental increments, taking permissions for house renovations, or anything else. Besides all that, you’ll be building an asset. Isn’t it amazing? Indeed, it is. But, with all the excitement and freedom you’re about to receive, there will be certain hurdles. You would still be needing permissions to renovate (from several authorities), pay some monthly charges (if living in a condo), and have to strictly manage your finances (to pay mortgages, taxes, and other related expenses).
Is it still exciting to buy your first home, or are you scared now? Worry not. I will make your journey smooth and will try to keep it as exciting as you once imagined. All you need to do is to stay with me till the end of this content. This post is your helping hand to avoid the top house-buying mistakes first-time homebuyers often make.
The Top House-buying Mistake to Avoid
Not Knowing What You Can Afford
First-time homebuyers are often very excited. They randomly begin their online home-buying search, ignoring what they can afford. It could show them unmatching results. The right way is to know what your price range is and then start the hunt.
For example, if you live in Mississauga and looking to buy a condo, begin your search for condos for sale in Mississauga with the low end of your price range. If the result gives you the best option, stop your search and book a showing with the realtor. If not, expand your search by gradually moving towards the high end of your price range.
Remember, for every extra dollar you pay for the house; there’s an extra amount of interest to be paid. So when you increase your price range, expect a variation in interest as well.
Ignoring Mortgage Pre-Approval
Homebuyers sometimes ignore mortgage pre-approval. A mortgage pre-approval will save you time and effort. It will also help you know how much the lender is willing to pay you.
For example, based on your income score, you might think you can afford an $800,000 (CAD) house. However, lenders go deep and use various financial measurements to approve any mortgage amount. They might disagree with you and approve a low amount for the house loan. If you didn’t apply for a mortgage pre-approval, it could cancel your deal with the home seller, leaving you empty-handed.
So, after you realize what you can afford, you need to go to the lenders for mortgage pre-approval. They’ll reassess your financial stability and, based on their calculations, would then approve your home loan.
Ignoring Window Shopping
Window shopping for homes works almost the same as for clothing. Before you begin your search for a new house, identify your requirements. That may include:
- How many bedrooms do you want?
- What is your preferred location to live and why?
- Which type of house will be suitable for you?
If you’re single or living with a partner with no kids, you might go for a condo. But if you’re planning to raise a family, a single-family home would be better for you. They are usually bigger homes with a backyard, separate living space for the kids, and have an extensive covered area.
List down everything that works well for you and your family, and then begin your home search.
Not Hiring the Right Realtor
Another common mistake first-time homebuyers often make – not hiring the right realtor. You may buy a house without having a realtor beside you, but it isn’t recommended, especially for first-time homebuyers.
Realtors are market experts. They know what is happening in the local housing market, how to negotiate, close, and what is required to become a homeowner. They’ll also help you meet other professionals, such as real estate lawyers, home inspectors, fixers, etc. Most importantly, these professionals essentially work in the best interests of sellers and buyers.
Rushing to Make an Offer
Even with a super real estate professional, you should have some sound knowledge of the current housing market.
For example, just a little while ago, 2-bed bungalows for sale in Mississauga had an average price of $1.4 million. And most recently, the price has dropped to an average of $1.1 million.
Home prices keep on changing day in, day out. It would help if you stayed updated as you’re the one to pay for the costs involved in buying your first home.
The Bottom Line
Buying a home is one crucial decision. You have to be very sure about every move you make. One of them is working with a reputable realtor, the one who gives you more value than filling his pockets.